What is 'juice earnings'? In the 1990s, they served as the conduit for a major wealth transfer from shareholders to employees. Boards awarded options as if they were handing out candy. Consultants promoted option issuances as if it were play money. CEOs looking to juice earnings were pleased to issue options as they were not treated as an expense. Employees enjoyed the free lottery tickets.
Oct 31, 2018 12:57 AM
Answers · 6
It's 'to juice earnings'. In this context, 'to juice' something is to add a little extra money. It sounds like shareholders were able to add a little 'juice' to their earnings by offering stock options in lieu of traditional compensation or bonuses.
October 31, 2018
In this context, earnings mean a company's profit. Normally, when a company pays an employee a salary, that salary is an expense, which causes the company's profit to decrease. By giving options to the employee, the company does not incur an expense. Therefore, its profit does not go down. In this case, that's what "to juice earnings" means. Keep in mind that this was true in the 1990s. Nowadays, options are required to be expensed.
October 31, 2018
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